Green ditches dividend amid falling Arcadia profits. By Dan Martin

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Billionaire retailer Sir Philip Green will not take his usual bumper dividend this year after his fashion business saw pre-tax profits fall by 20%.

Results released by the Arcadia group, which includes Top Shop, Burton, Dorothy Perkins and Miss Selfridge, showed pre-tax profits dropped from 253m to 202.4m in the year to September.

The decline was a consequence of disappointing sales figures for the company. Although total sales were up 1.8%, the like-for-like figure, which excludes all new store openings, fell by 1.9%.

Last year, Sir Philip paid himself a 1.2bn dividend, the world's biggest ever. But following today's news he confirmed that this would not be the case in 2006.

Despite the figures however, the entrepreneur said he was pleased with the results.

"This represents a strong performanc...

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The dividend could not be repeated
The company had negative retained reserves after last year's bumper dividend. You might get away with that once, but not twice.

I would suggest that the straightforward perception of the dividend as a payment to shareholders out of profit might need to be revised in this case. That particular, record breaking, dividend was somewhat more complex than that.

See my thoughts on this at http://www.taxresearch.org.uk/Blog/2006/06/19/sir-philip-green-the-rewards-of-tax-avoidance/

Richard Murphy
http://www.taxresearch.org.uk/blog/.

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